IN THE COURT OF APPEAL OF MANITOBA Coram: Huband, Twaddle and Hamilton JJ.A. B E T W E E N : THE MANITOBA HYDRO-ELECTRIC ) P. R. Grant and BOARD ) D. Kalmakoff ) for the Appellants (Plaintiff) Respondent ) ) - and - ) A. B. Graham, Q.C., ) J. B. Hirsch and CROSS LAKE FIRST NATION, CROSS ) K. C. Murphy LAKE EDUCATION AUTHORITY and ) for the Respondent BAND COUNCIL CROSS LAKE ) ) (Defendants) Appellants ) C. J. Henderson ) for the Attorney General - and - ) of Canada ) THE ATTORNEY GENERAL OF CANADA ) ) S. M.

Hoeppner (Defendant) ) for Her Majesty the Queen ) in Right of Manitoba - and - ) ) HER MAJESTY THE QUEEN IN RIGHT ) OF MANITOBA ) Appeal heard and ) Decision pronounced: (Intervenor) ) March 25, 2003 HUBAND J.A. (for the Court): 1 The Manitoba Hydro-Electric Board (Hydro) commenced an action in the Court of Queen’s Bench suing the defendants (collectively described as Cross Lake) for the non-payment of the cost of providing electrical power to the Cross Lake community and its citizens. 2 Cross Lake applied for a stay of that proceeding.

The application was rejected by Nurgitz J., and Cross Lake has appealed. 3 Cross Lake contends that the claim by Hydro should be determined by the arbitrator, who has jurisdiction to adjudicate claims which arise “directly or indirectly out of, or is attributable to the Project, or arises by reason of a failure to comply with or give effect to any provision contained in this Agreement.” The “Project” is a major hydro development in Northern Manitoba commenced some years ago, and the “Agreement” is the Northern Flood Agreement, which establishes a framework for the resolution of claims by certain communities and their citizens against Hydro, Canada and Manitoba. 4 We are in complete agreement with the conclusion of the motions judge that the claim advanced by Hydro in this litigation does not fall under the terms of the Agreement.

5 Other arguments were raised in the factum filed on behalf of Cross Lake, but they become irrelevant given our decision on this main question. 6 The appeal is dismissed with costs in this court and the Court of Queen’s Bench. Concerning the appeal, Manitoba waives any claim to costs, Canada will have the normal party/party costs, and Hydro’s costs are fixed at $2,000, plus a factum fee of $500, plus disbursements. _______________________________ J.A. _______________________________ J.A. _______________________________ J.A.